What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.1. Funds for HSA and Roth2. Going outdoors in unsafe areas3. Money conversations failing badly4. Auto insurance rate question5. Benefit to filing taxes early?6. Living in “food co-op land”7. Impulse buying Kindle books8. Estimating taxes for upcoming year9. Evaluating community while moving10. Choosing among retirement savings options11. Storing soups in the freezer12. Staying focused on personal finance?

I watched a portion of the Super Bowl last night and I couldn’t help but notice a giant theme running through the commercials. It seemed like every company was more interested in sharing some kind of socially positive theme rather than talk about their actual product. Budweiser. Dodge. T-Mobile. Lots and lots and lots of others.

You can see that as a good thing, I suppose, but what I actually saw was companies trying to associate a good feeling you might get from a positive social message to their product.

Just a gentle reminder: don’t buy a product or think more of a particular company because they had a socially conscious message last night. It’s just a marketing tactic, like any other marketing tactic. Buy products because they meet an actual need you have and, maybe, because the business has actual business practices that match something you care about. The ads mean next to nothing.

Q1: Funds for HSA and Roth

Midway last year I inquired about using my HSA as a retirement vehicle. Now that I’ve wiped away all my debt, I’m in the position to max out both a Roth IRA and HSA. Doing so leaves me with less “unrestricted” savings, but it boosts my future potential and reduces short-term risk for health costs. To the point – I’d like to keep $3-6K in my HSA in minimal risk funds and treat any amount over that as retirement (preferably $3-4K mid-risk and the rest med/high-risk). I decided to go with HealthEquity (thanks for your input) – considering the current market, what funds do you suggest I pick for short, mid, and long-term? My 401(k) Retirement funds are currently in a Target fund with Vanguard, so I’m swaying towards that for long-term.
– David

Assuming you’re healthy and have no major familial health factors, I would do as you’re doing and treat literally anything over $5K or so as essentially “retirement” savings in the HSA.

HealthChoice offers a number of Vanguard fund options as described in this leaflet. Unless you are really into managing the fund balancing yourself, I’d choose a Vanguard Target Retirement fund that’s about 5 years past your expected retirement date and just sit on it.

If you do like balancing yourself, it really depends on your risk tolerance. Mine is high, mostly because I honestly don’t look at retirement fund balances more than about once a year. Vanguard Total Stock Market is a good choice that I use.

Q2: Going outdoors in unsafe areas

You guys make a lot of posts about going out into nature as it is a free and fulfilling way to spend your time. But what advice do you guys have for women living in high crime areas, where going out for a jog is a risk, and people can get their shoes taken on a nature walk? I live in Southern Africa, Namibia specifically, and crime, especially violent crime is high. Doing the outdoor things I am used to doing in the states is a struggle.
– Agetha

I love going on outdoor walks when the weather cooperates. It provides a great sense of inner peace and a calming of the mind that helps me to think more clearly, plus it provides some good exercise. I’m fortunate to live in a place where everyone in my family can walk safely, however.

In your situation, here are a few things I would try.

One, look for someone you can go on a walk with. Who can you go with that would at least provide a group setting or could provide some safety? Do you have any trusted friends or relatives who could form a walking group with you? Groups are safer than individual people.

Two, look for high-traffic areas where lots of people go, such as a high traffic public park in a city, and stick at least somewhat near other people. Are there any places near you that get a lot of walking traffic? Stick to those places because it’s much harder to pull off a violent act in a crowd.

Three, walk in the daytime where it is harder to be approached without notice. Again, if you keep to places that are at least somewhat near other people, it vastly increases their ability to see you and that makes attacks more risky.

While those solutions aren’t perfect, they’re definitely a start.

Q3: Money conversations failing badly

I’m 28 and a software engineer. My wife is 27 and a dental hygienist. Over the last year I have realized that we spend more than we earn and our collective credit card debt is over $24K. We need to turn things around or we can never afford a child or a home. Whenever I bring this up my wife screams and says that I’m “trying to kill our fun years” and make her life “hell.” I’m not sure what to do.
– Kevin

Start with goals, not with dollars and cents.

Talk about where you each want to be in five years or ten years. Just ask her to sketch out where SHE wants the two of you to be, on her own, and make your own description of what you want for your life together in five or ten years. Do not talk about money in that picture. Then sit down and merge those pictures. Look for what they have in common, because those are five to ten year goals you agree on.

From there, talk about how to get to those goals. How do we get from here to there as painlessly as possible, starting right away? Putting off getting started means putting off that better life, and it probably also means that the life isn’t really desired. If it’s not desired, then what is desired?

Basically, nudge her down the path of thinking that comes to the realization that reckless spending stands in the way of bigger things in life. It will be painful, but that realization needs to occur, and it needs to occur inside of her. You can’t force it on her.

Q4: Auto insurance rate question

Can you please explain why car insurance raises rate to over $300 on a stop sign citation. The neighborhood was pretty quiet with no cars around and I just did not see the Stop sign at a pretty slow speed. It seems the insurance company need to rate speeders vs slow drivers differently. Are you able to explain how insurance company give different rate to individuals on cars or home based on location, record or incorrect record, etc?
– Meghan

Insurance companies use large pools of information to figure out how likely you are to be in an accident. They may have data that says, for example, someone who gets a stop sign citation is 58% more likely to be in an accident. That’s just one example – they may have data that says that a person is 23% more likely to get into an accident if they drive a red car, or 12% less likely if they’re driving a Honda compared to an average car. They have tons and tons of data like that about all kinds of groups. Because of that, they raise rates on you because you’re now in that “stop sign citation” group.

They really don’t care about the specifics of your situation, frankly, because they don’t have time to be. They can’t investigate the specifics of every ticket. Instead, they assume that the ticket was issued by an average cop in an average situation, like all of the other tickets in their big pool of information.

This is called actuarial science, a long established sub-field of mathematics, and it sets your insurance rates based on their model of how risky you are. By getting a stop sign citation, you raised your risk inside of their model and thus they’re charging more. It doesn’t matter whether or not you really are risky, but that your behavior that they can observe identifies you as being more risky than they used to think, thus the higher rates.

You can always shop around for better rates, but you’ll always be pushed through whatever models each company has.

Q5: Benefit to filing taxes early?

Is it better to file taxes when you have all of your papers or should you wait until you have everything in hand first?
– Derek

It’s better to prepare them now so that you can discover whether or not there are any missing documents or other issues sooner rather than later. There’s nothing worse than having April 15 roll around to discover that you’re missing a key document.

Actually filing makes little difference if you’re confident that your return is correct and complete. If you’re expecting a return, filing earlier will get you that return earlier.

The key thing is to make sure you’re submitting a complete and accurate return. Getting your papers together and actually going through that process sooner rather than later is a wise move. The actual date on which you file is less important, though I’d still give it a bit of breathing room in any case.

Q6: Living in “food co-op land”

My name is Jennifer, and I live in food co-op land.

A few months ago I got a great job and found a nice apartment about 4 miles from work that actually has a bus that goes back and forth between the two. Great! I bought a bus pass and everything’s good. I don’t need a car because I’m right in the middle of a bunch of services, too.

The only problem is that there are no cheap grocery stores near me. All of them are expensive. I am near two food co-ops and [a fairly high end grocery store]. All other grocers are at least two miles away and involve multiple bus switches to get there.

How do I make this work financially?
– Jennifer

Make it work financially by utilizing discount grocery stores when you can and buying tons of food there.

So, in your daily routine, use the food co-ops for fresh produce, especially for sales, and things you need in an urgent pinch.

Meanwhile, figure out multiple weeks of meal plans at once. Make a list of all of the nonperishables for all of them and all of the fresh produce for the next week.

Go grocery shopping with that list using the aid of a friend, and buy that friend lunch for the help. They can do their grocery shopping when you do, after lunch so neither one of you is hungry. Lunch costs you $20 or so but it’s also a social occasion, plus then you’re full at the grocery store and don’t buy impulsively.

That would be my approach to your situation. I’d just tap friends on occasion for big grocery trips at a cheaper store and buy them lunch for the help.

Q7: Impulse buying Kindle books

My biggest bugaboo when it comes to spending is that I impulse buy a lot of Kindle books. I am such an avid reader and being able to get a new book with a click is so tempting and easy that I do it all the time. I spent $280 last month on Kindle books! How can I stop?
– Aerie

Delete your credit card info from Amazon. Turn off one click ordering. That’s the start. Make it so that ordering a book from Amazon isn’t incredibly easy.

Then, read through what you have. I can’t imagine you’ve read through all of the Kindle books you have if you buy them at that rate. Just stop buying for a while. You theoretically have a ton of interesting books before you. Read them.

If you find you must read something new, get it from the library. Stop by and see if they have it and put in a request for it if they don’t.

You’ve got to break this cycle, and the biggest step you can take is just getting your credit card info out of there.

Q8: Estimating taxes for upcoming year

We almost have our 2017 tax filing done and I’m starting to look forward. I would like to calculate our estimated 2018 taxes to make sure our withholding is accurate. (My husband and I file jointly and will have 3 dependents in 2018. Our combined income of $175,000 makes the Form W-4 a little difficult to use. And the draft 2018 W-4 Form isn’t complete!) I haven’t been able to find a great resource on the internet that shows how to estimate our 2018 taxes. What is the best process to use to make sure our withholdings match our tax liability at the end of the year? Can you help?
– Nina

This isn’t a resource that is in wide availability yet. The best calculator I’ve found so far that incorporates the 2018 tax changes is this one which is somewhat bare bones.

In general, I don’t expect withholdings to change much for anyone, as although taxes are going down, the dollar value of withholdings is decreasing in parallel. There may be a few rare cases of people on the edge where there is a more “optimum” withholding, but the withholding rates are pretty straightforward.

Q9: Evaluating community while moving

My wife and I are about to move for career reasons. We’ve been evaluating houses and neighborhoods via Zillow and Google and other tools, but next week we’re going to actually be in the area looking at a bunch of houses.

We know what we want in a house itself, but what do we look for in a neighborhood? You mentioned in an earlier article that you chose your neighborhood because of the large number of families with young children. How did you identify that?
– Adam

The key, I think, is in knowing what kind of neighborhood you want to live in. My wife and I intentionally valued areas where there were many families nearby with younger children, so when we were looking at homes, we also glanced at yards up and down the block to see how many had play equipment back there, especially newer-looking play equipment. That’s a pretty sure sign of young children in the area.

You can find things like demographic splits and political stances pretty easily online. If you’re checking for religion, see what houses of worship are in the area. We wanted to live in a small town, but ideally one with more ethnic and religious diversity in town and in bordering towns than one might normally find in a small town in Iowa, so we used demographic tools to help us find that. (There’s a certain limit to how much diversity one might find in small town Iowa, but we found an area where there’s enough diversity that our children see different races, cultures, and religions as completely normal, which is what we wanted.)

What you should do is, on your way to the city where you intend to move, figure out what you both really want from a neighborhood. Then, use online tools to find out what you can (city/town/community sites, etc.), then keep your eyes open around the neighborhood when you visit, not just the house you’re looking at. Do you see play equipment in backyards? Do you see signs of sports fandom in front yards? Are there flyers anywhere for community events? Do you see lots of bumper stickers on cars? A house hunt isn’t just about the house itself.

Q10: Choosing among retirement savings options

My husband just started his new job as an assistant professor at a state university in Texas. In the next few weeks he has to choose whether to enroll in the Teacher Retirement System of Texas (TRS) or the Optional Retirement Program (ORP). The TRS is “a traditional defined benefit state retirement program in which investment risks are generally absorbed by the state,” aka a pension system. The ORP is “an individualized defined contribution plan in which each participant selects from a variety of investments offered by several companies (authorized by the employing institution) through annuity contracts or mutual fund investments” aka a 403B plan. The choice of one over the other is a “One-time Irrevocable Decision.” No pressure! Both plans offer similar employer matching (6.5%). These websites provide a summary of the two options: page one and page two.

Which would your recommend we choose? I am inclined towards the ORP. We established years ago when we were still graduate students that our savings plan is to invest in low-fee index funds. However my husband ran the calculations on predicted benefits and calculated that we would get more out of the TRS. He assumed the current statutory retirement formula would remain (years of service x average of highest five annual salaries x 2.3) and that we would get 5%-9.5% nominal returns in the stock market. The yearly retirement income assuming 4% withdrawal in ORP is lower than TRS in almost all cases, especially if my husband stays in his job for 10+ years, which is possible with a professor position. But what happens if the pension becomes insolvent? I personally have much more faith in the stock market than in a state government.

In case it matters, here are some stats on us: I’m 29, he’s 35. We don’t yet have kids but plan on having at least two. We’d like to pay for their college educations at the best university they get into. We are also putting money aside for our parents if they ever need it. We are no longer eligible for Roth IRAs because of our income. We plan on contributing at least enough into my 401K and his retirement plan to get our company match. We also have a steadily growing taxable investment account, own a condo with a 15 year mortgage that we bought 1 year ago, and may purchase a house in the next few years. I would like to retire in about 20 years. My husband would like for it to be an option.
– Denise

Assuming no insolvency, the ORP is a higher risk but higher reward proposition than the TRS. If you have a long time before retirement, it’s probably the better option because your contributions will grow more in there. That would probably change if you were close to retirement age and making that choice.

Insolvency is a tricky factor. I think if TRS goes insolvent, there are going to be bigger problems going on, ones that will probably adversely affect ORP returns, too. I don’t think fears of insolvency should sway this decision.

The younger a person is, the more I would lean toward ORP. If you contribute at a high rate, it should lead effectively toward an early retirement, but that’s a personal call for you.

Q11: Storing soups in the freezer

What is your recommended way of storing soups in the freezer? Ziploc freezer bags or containers?
– Drew

If you’re just dabbling, Ziploc quart freezer bags are fine. The only problem is that you can’t really microwave soup right in the bag. You have to thaw it a bit, then move the soup to another container, which can be messy. Plus, the bags have limited reuse – freezer bags only last a few times in my experience. I tend to rinse them, invert them, and run them through the dishwasher on the high rack. (Freezer Ziploc bags cost as much as $0.40 a pop – for the ten seconds it takes to turn them inside out, rinse them, and run them through the dishwasher, it’s worth it.)

If you do it a lot, get some containers that are both freezer and microwave safe that you can reuse many times. I really like these containers for that dual purpose.

The best way to label any kind of container in the freezer is with masking tape and a marker. Masking tape stays on the item in the freezer and easily peels off later without any permanent markings on the container, so you can label it again in the near future.

Q12: Staying focused on personal finance?

How do you stay so focused on personal finance? You’ve been writing like daily for 11 years?!
– Dana

There are a number of things that I do to keep up interest.

The big one is searching for new angles. I still find things regularly that surprise me. I like to try them out and share them if there’s value.

I’m also finding a lot of value in areas that are overlapping with personal finance, like personal development and growth in other areas of life. They overlap a lot, and many of the general principles apply really well.

I also recognize that new people are coming to the site all the time, so I sometimes dive back in and find a really good article I wrote several years ago and write a new version reflecting on what’s still true and what I’ve learned in the interim.

Reader mailbag questions and conversations with people keep me thinking as well. I get more questions in a week than I can use in a mailbag. Sometimes they wind up being full posts on their own. Other ones wind up being just food for thought.

In a given week, I usually have more ideas for posts than I actually end up using.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.